Encompassing over 70 years of history of independent India, in our Budget Trivia series, we present to you 70 lesser-known facts about the Budget process

1987-88 || Prime Minister Rajiv Gandhi, who also the finance minister, introduced a new concept to tax companies that remained outside the companies by claiming multiple exemptions. Which tax is this? Ans: Minimum Alternate Tax or MAT (Image source: Reuters)

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1988-89 | This budget announced a new tax saving scheme to mobilise untapped rural savings. This scheme became very popular because the deposit value doubled in after five-and-a-half years. Which scheme is this? Ans: Kisan Vikas Patra (Image source: Reuters)

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1989-90 | In order to stimulate the flow of personal savings into stock markets, this budget introduced a new instrument that quickly evolved into a very popular savings avenue among the salaried class, and till date remains very popular. Which scheme is this? Ans: Equity-linked savings schemes or ELSS offered by mutual funds (Image source: Reuters)

4/10

1990-91 | This budget abolished a popular tax incentive for companies, on grounds that many corporates were misusing the measure to evade taxes by claiming false expenditure made on machinery and adding extra capacity lines. The incentive made comeback 23 years later when P Chidambaram re-introduced the concept to spur investment. Which scheme is this? Ans: Investment allowance. It was abolished in 1990 to ensure better tax compliance, only to be brought back in 2013 to encourage investment and incentivise companies to add capacities and create jobs.

5/10

1991-92 | Manmohan Singh in his famous first budget of 1991, which dismantled the licence-permit-raj, opened up the Indian economy and the launched a series of structural reforms, also quoted a famous French novelist and poet to reinforce the need for economic reforms. Who was this novelist and what was the quote? Ans: Victor Hugo quoting his famous remark “No power on earth can stop an idea whose time has come.” (Image source: Wikimedia Commons)

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1992-93 | In his second budget, Manmohan Singh quoted a famous line from William Wordsworth’s famous poem “My Heart Leaps Up”. Which lines was this? Ans: “Child is the father of man”. Singh quoted this as he announced a new measure to plug gaps in gift tax that was misused by many to evade taxes by showing large amounts as income of minor children. Singh’s exact quote was: "It is said that child is the father of the man, but some of our taxpayers have converted children into tax shelters for their fathers”. (Image source: Wikimedia Commons)

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1993-94 | This budget announced the setting up of a major institution, paving the way for modernization of India’s stock markets. Which institution is this? Ans: National Stock Exchange (Image source: Wikimedia Commons)

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1994-95 | Three commonly used items became costly from 1994 after Manmohan Singh introduced a new tax that on a range of activities that accounted for 40 percent of India’s GDP. This tax paved that way for major reforms in India’s indirect tax structure. Which tax is this? Ans: Service tax. A 5 percent tax was imposed on services of telephones, non-life insurance and stock brokers.

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1995-96 | Manmohan Singh’s last full budget announced a major financial sector reform plan, which set the stage for opening up a sector that was dominated by public sector companies. What reform is this? Ans: Singh proposed to establish an independent Regulatory Authority for the insurance industry that eventually led to the setting up of the Insurance Regulatory Development Authority (IRDA) of India. (Image source: Reuters)

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1996-97 | P Chidambaram’s first budget introduced a new mechanism to oversee overseas investments in India that remained in practice for 20 years. What mechanism was this? Ans: Foreign Investment Promotion Board (FIPB), an inter-ministerial body, empowered to process foreign direct investment (FDI) proposals. This body was wound up in 2017. (Image source: Reuters)